In 2006 Jay Shah was appointed CEO of Hersha Hospitality Trust (NYSE:HT). First, this article will compare CEO compensation with compensation at similar sized companies. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.
How Does Jay Shah’s Compensation Compare With Similar Sized Companies?
At the time of writing our data says that Hersha Hospitality Trust has a market cap of US$750m, and is paying total annual CEO compensation of US$4.7m. (This number is for the twelve months until December 2017). While we always look at total compensation first, we note that the salary component is less, at US$750k. When we examined a selection of companies with market caps ranging from US$400m to US$1.6b, we found the median CEO total compensation was US$2.2m.
As you can see, Jay Shah is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Hersha Hospitality Trust is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Hersha Hospitality Trust has changed over time.
Is Hersha Hospitality Trust Growing?
Over the last three years Hersha Hospitality Trust has shrunk its earnings per share by an average of 42% per year (measured with a line of best fit). In the last year, its revenue changed by just 0.08%.
Few shareholders would be pleased to read that earnings per share are lower over three years. And the flat revenue hardly impresses. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Shareholders might be interested in this free visualization of analyst forecasts.
Has Hersha Hospitality Trust Been A Good Investment?
Hersha Hospitality Trust has not done too badly by shareholders, with a total return of 6.9%, over three years. But they probably don’t want to see the CEO paid more than is normal for companies around the same size.
We examined the amount Hersha Hospitality Trust pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.Earnings per share have not grown in three years, and the revenue growth fails to impress us.
And shareholder returns are decent but not great. So we doubt many shareholders would consider the CEO pay to be particularly modest! CEO compensation is one thing, but it is also interesting to check if the CEO is buying or selling Hersha Hospitality Trust (free visualization of insider trades).
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
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